Black's company faces accounts row

PRESS baron Lord Black's Canadian company Hollinger Incorporated could run into a fresh legal row today over the filing of its annual accounts.

There had been concerns that it would not meet a deadline - said to be today - to deliver audited accounts because it sacked its auditor and did not appoint a replacement until 5 March.

The new firm, Zeiffman & Co, which is the 12th-largest accountant in Canada, has not yet had time to complete the work.

Analysts at the Dominion bond rating service in Toronto had argued that the company could be in breach of bond covenants if it failed to produce the accounts, triggering a possible default that would leave the company in the hands of bondholders.

Hollinger denies that it has a deadline of today, saying that even if it did, missing it would not cause a bond default. The company claims it has 140 days from the end of its financial year on 31 December in which to file accounts.

The company is appealing against a Delaware court decision over a week ago which struck down Black's attempted sale of Hollinger and its media assets to the Barclay brothers.

The judgment also had harsh words to say about the probity of Black and some of his associates. But the appeal may have little practical effect on Hollinger International's sale of media assets, which is expected to continue as planned.

'Accordingly, we are exercising our right to seek review of the decision by the Delaware Supreme Court. Notwithstanding our challenge to the decision, we continue to support the efforts now under way by Lazard to achieve full value for shareholders.'

US federal regulators, meanwhile, have deepened their investigation into the US company Hollinger International, focusing on unauthorised 'non-compete' fees paid to Black and his chief deputy, David Radler.

The Securities and Exchange Commission (SEC) is believed to have issued subpoenas to at least three companies that bought local newspapers from Hollinger International, seeking documents related to the purchases in the late 1990s, 2000 and 2001.

Sources say the SEC is investigating whether the three companies sought non-compete agreements from individual Hollinger International executives.

Such agreements are at the centre of disputed payments by the company to Black.